8.17.3. Preparing a Statement of Account

(1) IRM 8.17, Settlement Computations and Statutory Notices of Deficiency, establishes the TCS policy framework for Appeals.

(1) The Appeals TCS is responsible for the accurate preparation of tax computations including all applicable computation schedules.

(2) The Appeals TCS Program Analyst is responsible for:

1. Updating the applicable IRM sections as needed

2. Reviewing training modules

3. Responding to inquiries

(1) See the table below for the most common acronyms in this IRM section:

(1) This section provides further discussion of some of the circumstances described inIRM 8.17.3.2 which require a statement of account.

(2) Unpaid assessments of tax or penalty - A transcript will reflect a balance due because of the unpaid assessment. Examples of assessments that may be partially or fully unpaid include:

1. Tax due from original filing.

2. Partial agreement.

3. Taxable amended return.

4. Assessment made after the notice of deficiency was mailed.

(3) Overpayments - Examples of situations which may result in overpayments include:

1. Credit balance on the transcript as a result of an unassessed advance payment. (See IRM 8.17.3.6 for definition of "unassessed advance payment".)

2. Credit balance on the transcript as a result of a frozen refund.

3. Payments made with an unprocessed return as a result of Substitute for Return (SFR) or Automated Substitute for Return (ASFR) proceedings.

4. Additional withholding credits allowable by Appeals or Counsel.

5. Overpayment created as a result of a decrease in tax liability (overassessment). "Overassessment" refers to when line 21 of Form 5278 or line 14 of Form 4549 or Form 4549-A reflects a decrease.

(4) Frozen Refunds - Frozen refund cases are those selected for examination prior to scheduling refunds claimed on returns. The IRS identifies issues that may indicate a taxpayer is not truly entitled to the refund amount claimed. An example of a frozen refund case is listed below:

1. Taxpayers may claim large refundable credits which may be "frozen" by the Campus pending examination of the return.

(5) Interim payments after mailing 90-day letter:

1. The taxpayer may have made a payment after the mailing of the 90-day letter that has not been assessed.

2. A credit balance on the transcript may be due to an interim payment.

(6) Interim assessments after mailing 90-day letter - An "interim assessment" is an assessment (other than a jeopardy assessment) of tax and/or penalties made after the notice of deficiency was mailed. The assessment can be unpaid, partially paid, or paid in full. Some examples of interim assessments are listed below:

1. Delinquent return assessed after the notice of deficiency was mailed.

2. Payment assessed after the notice of deficiency was mailed.

3. An amended return assessed after the notice of deficiency was mailed.

4. Assessment based on a signed waiver.

(7) Rule 155 computations, except where a short format computation is used - See IRM 8.17.2.12.3, Statement of Account, for more information.

(8) Jeopardy, termination, or prompt assessment cases.

1. Jeopardy assessment: A jeopardy assessment is made in situations where prior to the assessment of a deficiency or tax, it is determined that collection of such deficiency or tax would be endangered if regular assessment and collection procedures are followed.

2. Termination assessment: Termination assessments are very similar to jeopardy assessments except that under the provisions of IRC 6851, they are made only for the current or immediately preceding taxable year and can be made at any time prior to the due date for filing those years' returns.

3. Prompt assessment: A prompt assessment is made if collection appears to be at risk and the intention is to protect the government’s interest and revenue. See IRM 4.4.25, Quick Assessments, and IRM 5.1.4, Jeopardy, Termination, Quick and Prompt Assessments, for more information.

(1) When the TCS prepares a settlement computation for an AO or Counsel, the TCS will determine if a statement of account is required and prepare Form 3623 if one is needed. The TCS will forward a copy of the transcript used in preparing the computations.

(2) AO's who prepare their own settlement computations or who secure agreement on a docketed case that does not require a settlement computation must follow the procedures shown in IRM 8.2.1.8, Requesting Work From Tax Computation Specialist, when a statement of account is required.

(3) If a statement of account is required for a Counsel case that wasn't sent to TCS for settlement computations, Counsel must either send a secure e-mail request for the Form 3623 preparation to the applicable TCS manager, or submit a request using the Counsel Intake SharePoint site. Counsel should attach the following to the request:

1. Form 3608 (Found in the "Counsel Resources" section on the Appeals TCS web site).

2. Copy of notice of deficiency letter, or include the date of notice of deficiency letter and list penalties by code section.

3. Computations - Attach either RGS settlement computations or a copy of the notice of deficiency tax computation.

(4) If a case does not involve an issue listed in IRM 8.17.3.2, and the attorney thinks a statement of account is required, the attorney’s manager will need to approve the request.

1. The attorney should advise their manager that they think a statement of account is required for their case and why the statement of account is needed. The manager needs to approve or disapprove the request.

2. If approved, the approval needs to be in writing and the attorney needs to forward the approval to the applicable TCS manager. The communication to TCS needs to indicate why a statement of account is requested for that case.

3. The TCS manager will review the approval. If the TCS manager does not agree with the reasons given for why a statement of account is needed, the TCS manager should discuss the concerns with the Counsel manager in an attempt to reach a consensus as to whether a statement of account is needed. If a consensus cannot be reached, TCS will prepare the statement of account. Afterward, the TCS manager should elevate their concerns through the management chain of the TCS manager.

(1) The statement of account consists of an assessment section and a payment section. In each section there is a "Revised Liability" line. Enter the total liability for tax and penalty as finally determined on the revised liability line.

(2) The revised liability in tax amount is generally line 18 from Form 5278 (or line 11 from Form 4549 and Form 4549-A), unless the special format for refundable credits such as earned income credit and additional child tax credit is used. See IRM 8.17.3.3.5 for discussion of this format.

(3) If the IRC 6651(a)(2) penalty is still accruing:

• Per IRM 8.17.7.5.2, Failure to File and Failure to Pay Computations for SFR Returns, if the FTP penalty is still accruing and has not reached the maximum penalty of 25%, the FTP penalty amount is shown as an asterisk on the tax computation form. Language is also included in the settlement computation to explain that the amount cannot be determined.

• When the tax computation shows an asterisk for the FTP penalty, use an asterisk for the penalty amount on the statement of account. Include language on the statement of account to explain that the amount of the penalty can't be determined. Suggested sample language that can be used is "Amount to be determined" or "To be computed later."

(4) No change cases - Sometimes a Form 3623 is prepared for a no change case, such as when there is an overpayment in tax and/or penalty, or an unpaid assessment of tax and/or penalty.

• If a Form 3623 is being prepared for such a no change case, then the revised liability amount for tax will be the TC 150 posting plus any TC 29X or 30X postings shown on the transcript.

• Penalties: If a statement of account is being prepared for a no change case, a penalty asserted in the notice of deficiency only needs to be included on the statement of account if one of the circumstances in IRM 8.17.3.2 exists for the penalty (such as an overpayment of the penalty or an unpaid assessment of the penalty). In such a case, if penalties asserted in the notice of deficiency were assessed on the transcript, then the revised liability amount for penalties will be the amount shown as assessed.

(1) In the assessment section, show amounts and dates of assessments and overassessments (including abatements) from the transcript of account.

(2) Assessment (tax on return) line:

1. Enter amount of the return tax assessment shown on the transcript.

2. This is generally the TC 150 amount, unless the special format for refundable credits such as earned income credit and additional child tax credit is used. See IRM 8.17.3.3.5 for details of this format.

   Note: The "Assessment (tax on return)" date field is grayed out on the official Form 3623. Therefore normally a date is not required on Form 3623 when the taxpayer files a return and the tax is assessed with a TC 150.

3. Enter the amount assessed for a delinquent return filed after the SFR proceedings have begun, whether the return was assessed before or after the issuance of the notice of deficiency. The assessment is generally posted with a TC 290.

(3) Additional Assessments

1. Enter the amount and date of each additional assessment shown on the transcript.

2. Additional assessments might include assessments of partial agreements, amended returns, and the assessment of payments received after the notice of deficiency was issued.

3. Generally do not include assessments of penalties not shown in the notice of deficiency, and do not include interest assessments. However see IRM 8.17.3.5 for additional information.

(4) Overassessments

1. Show amounts and dates of overassessments, including abatements, from the current transcript.

2. Generally do not include overassessments of penalties not shown in the notice of deficiency, and do not include interest abatements. However see IRM 8.17.3.5 for additional information.

(1) Enter payment dates and amounts from a current transcript.

1. Use the due date of the return for payments made on or before the due date, such as withholding tax, estimated tax payments, credit elects, credit transfers, etc. (Any amounts withheld, paid as estimated income tax, or otherwise paid prior to the return due date are considered to have been paid on the due date of the return.)

2. The payments made on or before the due date of the return may be listed separately, combined into categories (for example, all estimated tax payments totaled and shown as one amount) or all payments made by the due date of the return can be totaled, and shown as one amount on the statement of account.

(2) It is not necessary to describe the type of payment on the statement of account.

(3) Be careful to allocate payments properly. Payment allocation depends on various factors such as:

1. Whether the payments were assessed or unassessed.

2. If the taxpayer designated the allocation of the payment.

3. If the payment was a cash bond or IRC 6603 deposit.

   Note: See IRM 8.17.3.6 and IRM 8.17.3.7 for information about allocating payments on the statement of account.

(4) Generally do not include payments of penalties not shown in the notice of deficiency, and do not include interest payment amounts. However see IRM 8.17.3.5 for additional information.

(5) IRC 6211(b)(4) refundable credits:

1. Refundable credits that are included in the definition of a statutory deficiency per IRC 6211(b)(4) include earned income credit (EIC), the refundable additional child tax credit (ACTC), first time homebuyer credit, recovery rebate credit, fuel tax credit, etc. See IRM 8.17.5.17.2, Adjustments to Refundable Credits Included in the Statutory Deficiency, for a complete list of IRC 6211(b)(4) refundable credits.

   Note: Since the list of refundable credits subject to deficiency procedures is amended often, IRC 6211(b)(4) will have the most complete, current list of these refundable credits by code section.

2. Adjustments to these credits require a special format per IRM 8.17.3.3.5 .

3. If the format in IRM 8.17.3.3.5 is used, then the IRC 6211(b)(4) refundable credits aren't entered in the payments section on the statement of account.

   Reminder: If there are no changes to the IRC 6211(b)(4) credits shown on the transcript and the refundable credit format shown in IRM 8.17.3.3.5 is not used, then enter the amount of the IRC 6211(b)(4) credits shown on the transcript in the payments section on the statement of account.

(6) Withholding Credits:

1. If additional withholding credits not shown on the transcript are allowed and a statement of account is prepared, include the amounts on the statement of account in the payments section using the due date of the return.

2. It is helpful to include a notation that these withholding credits are in addition to the amounts shown on the transcript.

(7) "Refunds or Credit" section:

1. Enter refund amounts such as TC 846 (computer generated refund) or TC 840 (manual refund).

2. Enter overpayment credits transferred to another account. The most common transaction codes are TC 826 or 820 and TC 836 or 830.

3. The use of the word "Credit" on Form 3623 in the "Refunds or Credit" section does not mean withholding credits, earned income credit, additional child tax credit, advance on child tax credit, rate reduction credit, or any other refundable credit.

4. List each refund or credit separately by date and transaction code (TC). (A TC 836 would be listed separately from a TC 846, even if they both have the same date, since they are different types of transactions.) It is not necessary to describe the type of refund or credit on the statement of account.

5. Do not show on Form 3623 any overpayment interest amount (TC 770 or TC 776) included in a TC 840 or TC 846 refund total. Any refundable interest (TC 770 or TC 776) included in the TC 840 or TC 846 totals must be subtracted before entering the remaining TC 840 or TC 846 amount on the Form 3623.

6. When the refund or credit is posted before the return due date, the actual date on the transcript or the return due date can be entered on the statement of account.

(8) Advance Refunds:

1. Various legislation over the years has been enacted to provide taxpayers with advance refunds. The most recent advance refund was the Economic Stimulus Payment (ESP). These advance refunds are seldom adjusted. They are posted with a TC 766, and the CRN identifies the type of credit.

2. Include the TC 766 advance refund amount as a payment in the payments section of the statement of account.

3. Include the related TC 846 refund amount in the "Refunds or Credit" section of the statement of account.

4. Generally the date to include on statement of account for any of these advance refunds is the date shown on the transcript for the TC 766 amount, not the due date of the return.

(9) If payments are designated incorrectly on the transcript of account, notify the Appeals Officer of the error. The Appeals Officer should request a correction by Account and Processing Support (APS).

(1) Complete the section at the bottom of Form 3623 when there is an overpayment:

1. Tax Year Ended - Enter any tax year that has an overpayment. It can be an overpayment in tax or an overpayment in a penalty, or both.

2. Year – This field may be omitted since Counsel's stipulations no longer include the year of the IRC. If completed, enter "1986". This field is for the latest complete revision of the Internal Revenue Code, which is considered to have been in 1986.

3. Section - The applicable IRC sections must be entered at the bottom of Form 3623. IRC 6512 gives the Tax Court authority to determine an overpayment. IRC 6511 imposes the limitation on the amount of the overpayment. See Exhibit 8.17.3-2. This exhibit provides an explanation of the overpayment code sections to use for statements of account.

   Note: The most commonly used code sections are IRC 6512(b)(3)(B) with IRC 6511(b)(2). If the taxpayer has a frozen refund, then IRC 6512(b)(3)(C) is used, usually with IRC 6511(b)(2).

4. Date Return Filed - Obtain the date from the transcript. For Substitute for Return (SFR) or Automated Substitute for Return (ASFR) cases, you can indicate that the taxpayer did not file a return by using "SFR", "ASFR", "No return filed", or "None".

5. Date Agreement Signed - This is the date the Form 872, Consent to Extend the Time to Assess Tax, or Form 872-A, Special Consent to Extend the Time to Assess Tax, was countersigned by the IRS, not the date the taxpayer signs the form. The AO or Counsel may need to provide the TCS with this information.

6. Statute Extended To - Obtain this date from the statute extension Form 872. If Form 872-A was used, just enter "872-A" instead of a date. The AO or Counsel may need to provide the TCS with this information.

7. Date Deficiency Notice Mailed - This is the “Letter Date” field on the notice of deficiency Letter 894 and Letter 901. The AO or Counsel may need to provide the TCS with this information.

8. Date Claim Filed - Complete when a valid claim for refund was filed before the notice of deficiency was issued. The AO or Counsel may need to provide the TCS with this information.

   Note: The "Date Claim Filed" section on Form 3623 is also completed when there is a frozen refund shown on the transcript. If there is a frozen refund, the Date Claim Filed is the date the taxpayer filed the return.

9. Amount of Claim - Use the amount of refund requested on a valid claim for refund filed before the notice of deficiency was issued that has not been allowed. For a frozen refund case, use the amount of refund shown on the taxpayer’s return. (Use the amount of refund shown on the taxpayer's return even if part of the claimed refund has already been refunded.)

(2) However, certain types of overpayments don't require the section at the bottom of Form 3623 to be completed:

1. Total overpayment is barred - See IRM 8.17.3.3.6.

2. CDP case IRM 8.17.3.3.7 .

(3) The section at the bottom of Form 3623 must be completed when there is an overpayment except as noted in paragraph (2) above. Counsel attorneys will be advised to return Forms 3263 in overpayment cases which do not have the bottom section completed when required.

(1) This section addresses how to prepare a statement of account when adjustments are made to refundable credits that are included in the definition of a statutory deficiency per IRC 6211(b)(4).

(2) Examples of IRC 6211(b)(4) refundable credits are earned income credit (EIC), the refundable additional child tax credit (ACTC), first time homebuyer credit, recovery rebate credit, fuel tax credit, etc. See IRM 8.17.5.17.2, Adjustments to Refundable Credits Included in the Statutory Deficiency, for a complete list of these refundable credits.

(3) A statement of account is not required simply because there are adjustments to IRC 6211(b)(4) refundable credits. However, if a statement of account is required as outlined inIRM 8.17.3.2 and IRC 6211(b)(4) refundable credits are adjusted, follow the procedures outlined in this section.

(4) When a statement of account is prepared and changes are made to IRC 6211(b)(4) refundable credits such as EIC, the refundable ACTC, the first time homebuyer credit, fuel tax credit, etc. see instructions below for how to compute the "Revised Liability" and "Assessment (tax on return)" lines:

• "Revised Liability": Decrease the corrected income tax liability amount by the amount of the corrected refundable credits, and enter the result on the "Revised Liability" lines of Form 3623. (Use the corrected amount of refundable credits instead of the amount of the adjustment to the refundable credits.)

• "Assessment (tax on return)": Decrease the assessed tax per return by the amount of the assessed refundable credits and enter the result on the "Assessment (tax on return)" line of Form 3623.

(5) Do not show the IRC 6211(b)(4) refundable credits claimed on the return and posted to the taxpayer’s account in the payments section since these amounts are considered in the liability section.

(6) Also include the exact amount refunded to the taxpayer in the payments section regardless of whether the refund included any of these credits.

(7) See Exhibit 8.17.3-4 for an example of adjustments to both the EIC and the refundable additional child tax credit on Form 3623. This example also has a frozen refund, and the result is an overpayment.

Note: Modify and use the format shown in this exhibit for any cases involving adjustments to other IRC 6211(b)(4) refundable credits such as first time home buyer credit, recovery rebate credit, fuel tax credit, etc., which require a statement of account.

(8) Excel Form 3623 spreadsheets that can assist you with cases involving adjustments to the IRC 6211(b)(4) refundable credits are accessible from the "Spreadsheets Sharepoint" link on the Appeals TCS web site. Both the "General" and "Individual" spreadsheets folder have a "Form 3623 Refundable Credits" Excel file which has formulas and drop down menus which allow you to select the appropriate refundable credit.

(9) If the IRC 6211(b)(4) credits claimed on the return aren't adjusted in the settlement or Rule 155 computation and a statement of account is prepared, the format discussed in this section to show the refundable credits can be used, but it's not required. If the refundable credit format shown in this section isn't used, then instead enter the amount of IRC 6211(b)(4) credits shown on the transcript in the payments section of Form 3623

(10) For a list of current examples of refundable credits please see the Technical Support SharePoint site.

(1) Total overpayment or deficiency is barred:

1. If the total overpayment or deficiency is barred and a footnote included on the Form 3610 or the tax computation form, then no notation on Form 3623 is required.

2. However if a statement of account is prepared, the barred amount may be notated with an asterisk (*) and a footnote added to Form 3623. The following is an example of the footnote on Form 3623 for a barred overpayment case:

"Overpayment barred by statute of limitations."

Note: When the total overpayment is barred on a docketed case, the bottom of the Form 3623 should not be completed.

(2) If only part of the overpayment or deficiency is barred:

1. The total amount may be asterisked (*) and a short summary of the barred amount added to the bottom of the Form 3623. The following is an example of the summary for a case when only part of the overpayment is barred:

Overpayment	$6,000.00
Overpayment barred by Statute of Limitations	1,000.00
Overpayment Allowable	$5,000.00 ========

(3) If there is a barred overpayment or deficiency for a CDP case, see IRM 8.17.3.3.7 for requirements.

(1) Preparing a statement of account for a CDP case can involve a number of complicated legal determinations. Therefore, due to the complex nature of CDP cases, see following discussion:

1. When there is an overpayment for a CDP case, the TCS is not required to complete the section at the bottom of Form 3623. The Settlement Officer, AO or Counsel attorney will need to determine the information to include in the stipulation.

2. Notations to indicate a barred overpayment or deficiency are not required on a statement of account prepared for a CDP case. The Settlement Officer, AO or Counsel attorney will need to determine the appropriate information to include in the stipulation.

(1) A jeopardy assessment made prior to the issuance of a notice of deficiency is not taken into consideration in determining the statutory deficiency. In such cases, show the following on the statement of account:

• The deficiency in tax and penalty before the jeopardy assessment,

• The deficiency or overassessment of tax and penalty after considering the jeopardy assessment, and

• The underpayment or overpayment of tax and penalty. (The underpayment or overpayment of tax and penalty before the jeopardy assessment should be the same as the underpayment or overpayment of tax and penalty after the jeopardy assessment.)

(2) Statement of account formats for jeopardy assessment cases:

• The statement of account can have one column to reflect the deficiency in tax and penalty before the jeopardy assessment, and another column for the deficiency or overassessment of tax and penalty after considering the jeopardy assessment.

• Or, two separate statements of account can be used.

(3) See IRM 8.17.5.21, Jeopardy Assessments in Settlement Computations, for more information about jeopardy assessments.

(4) Handle termination assessments under IRC 6851 similar to jeopardy assessments.

(1) The statutory notice of deficiency procedures do not apply to the individual shared responsibility payment itself. However, there may be adjustments to the SRP or other SRP issues in a case (e.g. an income tax case) where deficiency procedures do apply. Generally, in these cases, whether for purposes of preparing settlement computations or for purposes of preparing a notice of deficiency, TCS will recalculate MFT 30 and MFT 35 SRP based on adjustments to income following normal procedures. See IRM 8.17.2, Settlement Computations and Statutory Notices of Deficiency, General Settlement and Rule 155 Computations. The SRP may appear on the calculations attached to a notice of deficiency, but the SRP amount must not be included in the deficiency amount because it is not subject to the Tax Court’s jurisdiction.

(2) The ATE should indicate on the schedule of adjustments whether the SRP is being adjusted and the amount reported per return.

(3) The ATE should also consider the following items when adjusting the SRP:

1. Income tax return

2. Date of birth of any dependents (if applicable)

3. Household income (including income of those dependents whose income meets the income tax return filing threshold)

4. Months during the taxable year the taxpayer was or was not covered by insurance including dependents (if applicable)

5. Form 1095-A, Health Insurance Marketplace Statement (if applicable)

6. Form 1095-B, Health Insurance Coverage (if applicable)

7. Form 1095-C, Employer-Provided Health Coverage (if applicable)

8. Form 8965, Health Coverage Exemptions (if applicable)

(4) When the ATE indicates that the SRP is an adjustment, TCS will recalculate MFT 30 and MFT 35 SRP based on adjustments to income following normal procedures. A link to the SRP Calculator is found on the Appeals ACA Webpage.

(5) If there is no change to the SRP, TCS will include a notation in their case activity record and email the requesting ATE that there is no change to the SRP.

(6) Form 3610, Audit Statement, is recommended for cases involving the SRP.

(7) See the SRP folder on the Appeals TCS SharePoint Site for sample computation forms and Form 5403 Worksheet containing special language required for SRP.

(8) If there is an adjustment to the SRP, the calculation will be shown on a schedule included with the computations.

(1) Unassessed advance payments designated as deposits under IRC 6603 or as cash bond deposits are not included on the statement of account.

(2) Instead, include a notation at the bottom of the statement of account as discussed in the paragraphs below.

1. If the IRS is holding a cash bond made under Rev. Proc. 84-58 and not subsequently designated as a deposit under IRC 6603:

   Example: 1: Taxpayer A submits a $2,000.00 cash bond deposit on 09/09/2004 under Rev. Proc. 84-58 for the tax year 2003. Taxpayer A did not subsequently designate it as a deposit under IRC section 6603. Use the following wording:
   
   A cash bond in the amount of $2,000.00 was received for tax year 2003 on 09/09/2004.
   
   See Exhibit 8.17.3-1 for illustration of Example 1.

2. If the IRS is holding a cash bond deposit on 10/22/2004, treat the deposit as made on 10/23/2004 for purposes of IRC 6603 if the taxpayer provides a written statement before 05/27/2005 which identifies the amount as a deposit under IRC 6603.

   Note: Notate the date of the payment and the 10/23/2004 date at the bottom of the statement of account.

   Example: 2: The facts are the same as Example 1, except a written statement conforming to the requirements of Rev. Proc. 2005-18 was received on 05/02/2005. Use the following wording:
   
   A cash bond in the amount of $2,000.00 was received for tax year 2003 on 09/09/2004, and determined to be a deposit made under IRC 6603 as of 10/23/2004.

3. In the case of a deposit that is made after October 22, 2004, and before March 28, 2005, treat the deposit as made on the date remitted for purposes of IRC 6603(d) if the taxpayer provides a written statement before 05/27/2005 which identifies the amount as a deposit under IRC 6603.

   Note: Include the date of the payment and the date it is determined to be a deposit under IRC 6603 at the bottom of the statement of account.

   Example: 3: Taxpayer B submits a deposit on 12/29/2004 in the amount of $3,000.00 for the tax year 12/31/2002. A written statement conforming to the requirements of Rev. Proc. 2005-18 is received on 05/12/2005. Use the following wording:
   
   A cash bond in the amount of $3,000.00 was received for tax year 2002 on 12/29/2004 and determined to be a deposit made under IRC 6603 as of 12/29/2004.

4. In the case of a deposit in the nature of a cash bond previously made pursuant to Rev. Proc. 84-58 where the taxpayer’s statement is received on or after 05/27/2005, treat the date the Service receives the written statement as the date the amount is deposited for purposes of IRC 6603(d).

   Note: Include the date of the payment and the date it is designated as a deposit under IRC 6603 (the date the Service receives the taxpayer’s statement) on the bottom of the statement of account.

   Example: 4: The facts are the same as Example 1, except a written statement conforming to the requirements of Rev. Proc. 2005-18 was received on 05/30/2005. Use the following wording:
   
   A cash bond in the amount of $2,000.00 was received for tax year 2003 on 09/09/2004, and determined to be a deposit made under IRC 6603 as of 05/30/2005, the date the IRS received the statement required under Rev. Proc. 2005-18.

5. Use the wording similar to the following on deposits made under IRC 6603 on or after the March 28, 2005 effective date of Rev. Proc. 2005-18:

A deposit made under IRC 6603 in the amount of $3,000.00 was received for tax year 12/31/2002 on 06/16/2005.

(1) Cash bonds:

1. A cash bond is present if a 900 - 999 appears in digits 9, 10 and 11 of the DLN next to the TC 640 amount. It looks similar to the following:

TC	DATE	AMOUNT	CYCLE	DLN
640	12011996	2,000.00-	199552	55211-110-99922-1

(2) IRC section 6603 deposits:

1. Remittances submitted after October 22, 2004, identified by taxpayers as IRC 6603 deposits are processed and posted in the same manner as the Service previously processed a cash bond remittance. Deposits are identified by a TC 640, Blocking Series 999 and Designated Payment Code (DPC) 12.

2. See IRM 20.2.4.8.1, Cash Bonds, and IRM 20.2.4.8.2, IRC 6603 Deposits, for additional information.

(3) Converted deposits:

1. Because IRC 6603 deposits are processed and posted in the same manner cash bond deposits were previously processed, identifying deposits on a transcript that have been converted from cash bond deposits to IRC 6603 deposits requires a careful analysis of the case file.

2. Review the case file for the written statement that the taxpayer must submit to convert these previously posted cash bonds to IRC 6603 deposits.

3. The Appeals Officer or Counsel Attorney may need to contact the taxpayer to obtain additional information to verify if a cash bond deposit was converted to an IRC 6603 deposit, and the date of the conversion.